Naiop Article

Transcripts - Naiop Article

1.
R MAY 2012 - MISSISSAUGA BUSINESS TIMES - 13 Special Edition REAL ESTATE Includes ICI Real Estate Listings Directory Suburban development on NAIOP agendaNAIOP Greater Toronto Chapter held an early morning get together at the International Centre in Mississauga last month, the subject: Suburban Development2012, Perspectives from retail, industrial and office developers. Left to right: Phil King, president, Orlando Corp. (panelist); Jeff Miller, vice-president, InvestmentOfficer, ProLogis; Dean Cutting, partner, Carttera Private Equities Inc. (panelist); Paul Morassutti, executive vice-president and senior managing director,CBRE Limited (moderator); David Ward, director, Acquisitions, Morguard Investments Limited, and president of the NAIOP Greater Toronto Chapter; MauroPambianchi, chief development officer, SmartCentres (panelist); and Antony Lorius, associate partner, Hemson Consulting Ltd. (keynote speaker). Photo by Stephen Uhraney By Rick Drennan occur?, what does the 2011 census tell us? , more employment areas, more highways, and developers have shown a lot of discipline in what is the impact of the greenbelt?, what are more urban modes in the suburbs. dealing with the banks and the economy. T he year 2008 might be indelibly the effects of provincial policies (the growth There’s a big challenge for retail over this King agreed. “We haven’t overbuilt,” he said. imprinted in ICI realtors’ minds as plan)?, and how will that affect development? period, he said, and it’s all related to the Orlando sits on 40 million square feet of the start of the economic Lorius included the entire GTAH – geographic pattern of population growth. development over its illustrious history andmeltdown, but 2005 was the real game Greater Toronto Area and Hamilton – in his This development will be concentrated will celebrate the 25th anniversary of thechanger for brokers and developers in talk, and focused on the years 2011 to 2031. primarily in developed urban areas like giant Heartland Centre next month.southern Ontario. He pointed out that growth will continue Mississauga, Brampton, Vaughn and even the King predicts that spec development will So said Dean Cutting, a partner with at double-digit levels in the Peel region (18 outskirts – Milton and centres north and east continue in the industrial market, butCarttera Private Equities Inc. Cutting was per cent), and employment growth will better of Toronto. probably not in office. Orlando has “four orone of the panelists along with Mauro that at 23 per cent. He also touched on a new phenomenon: a five” spec buildings currently underPambianchi, executive vice-president, He pointed out that 8.7 million people shift to more compact retail forms. The days construction, at the 200,000 to 500,000SmartCentres, and Phil King, president of reside and work in the of the big box power malls square foot size. “We build just what weMississauga-based Orlando Corporation at Greater Golden Horseshoe might be ending. need,” he said.NAIOP’s ‘Perspectives on SuburbanDevelopment 2012’ at the Mississauga these days, and that will increase dramatically by Mood is Lorius is an associate partner at Hemson with There will always be risk associated with spec building, said Cutting, “but I think [inConvention Centre last month. The event 2031. expertise in the areas of this business] you get paid for risk.”was hosted by NAIOP’s 905 committee. The moderator for the panel was Paul He noteed that there is still plenty of room for upbeat as long-range planning and g r ow t h m a n a g e m e n t , The talk eventually turned to what most predict will be dramatic jumps in theMorassutti, executive vice-president andsenior managing director, CB Richard Ellis’svaluation and advisory services. development despite the greenbelt area, and despite the fact that suburban industry employment land analysis and market and economic impact studies. development charges by municipalities in the near future. The panelists also think there will be more The panel discussion took place afterAntony Lorius, associate partner at Hemson cities like Mississauga are almost completely built moves toward He says realtors and developers should see intensified development on brownfield sites, which is already happening in the GTA.Consulting, talked about the challenges faced out. “more friction” in the Trying to jam more people into smallerby industrial/commercial realtors anddevelopers over the next 20 years. Lorius expects a lot of brownfield and greyfield 2031 approvals process “than they’ve been used to in the spaces might work for retail and office, but it won’t at the industrial building level, said Cutting pointed out that ‘Places to Grow’ development to take place past,” and some of the King. “There might be more people in officelegislation brought in by the McGuinty in the 905 corridor over the next 20 years. “new industrial frontiers (like Waterloo buildings than five years ago,” he said, “butgovernment in ’05, putting the emphasis on He agrees with Cutting that the provincial Region)” will continue to attract business in the opposite is true in industrial.”more upward not outward development (less growth plan rules can be a great constraint to the future, despite the recent downturn at King said building LEED certified willsprawl), has acted as a restriction on development, with high-density housing and Research in Motion (RIM). continue, but it’s a moving target. Aredevelopment. employment to be directed to urban growth He admits that “putting new land excessive LEED costs to build outweighing All changed with Places to Grow, said centres, already designated by Queen’s Park – designations into place” is definitely more the savings in operating costs?Cutting. The greenbelt put us on an island. including Mississauga and Brampton. difficult under the province’s growth plan, It depends on the development, he said. An expensive island. A still vital island. Lorius predicts that 40 per cent of new but at least there is a “clear direction in how What savings might work in an officeBut an island where opportunities for growth residential units will be accommodated growth will be accommodated,” and defining environment, won’t necessarily be the samemight shrink, while development costs keep through intensification, while conversion of the urban envelop will evolve over the next in an industrial building.going up. industrial and business park areas will be generation. The next NAIOP event is ‘The Changing No doubt, there are multiple challenges minimized. Lorius is bullish on the GTA and calls it Face of Urban Retail in Toronto, May 3rd atbeing faced in the suburban market, and a His glass-half-full presentation predicts a the “most industrialized economy in Canada Arcadian Court (401 Bay Street, 8th floor.)full contingent of realtors and developers 35 per cent employment growth over the and the United States.” It’s also a breakfast get together.took in the morning get together, part of 2011-2031 period, which should be good Even if manufacturing continues its Check out www.torontonaiop.com.NAIOP’s focus on the 905 region. news to brokers and developers. There will dramatic slide, there will be no reduced The Commercial real estate development The breakfast discussion follows hard on continue to be a high demand for industrial demand for industrial land. association (NAIOP) has 50 chapters inthe heels of a recent Colliers report on the and business park land. “We’ll still need the space to make and North America, acting as an extensivere-urbanization of Toronto’s downtown area. Providing adequate land supply will be the move the stuff that is needed,” he said. network that represents the interests of The incredible growth of the condo key challenge – even if manufacturing in Fr o m a n e c o n o m i c d e v e l o p m e n t developers and owners of commercial realmarket is pushing the office market vacancy Ontario continues to dip significantly. perspective, he calls the GTAH “one of the estate.rate to new lows and putting additional The office market will continue an upward best planning systems in the world.” There The 905 Chapter is relatively new.pressure on tenants, said the semi-annual climb as well, he said, with upwards of 50 should be lots of optimism and opportunity, David Ward, director acquisitions forreport. million new square feet of space coming into he said. Morguard Investments Ltd., is president of In Lorius’s presentation, he asked five the market over the period of his study. Cutting noted that “there’s not a lot of its Greater Toronto Chapter.important questions: where will the growth That will continue to fuel the need for space out there [in the 905]. He believes www.businesstimes.on.ca